Art. 9 Categories of Collateral

Question 1

Collateral

Answer 1

The property subject to a security interest. Property that the secured party can repossess upon default to insure that the debt is paid off.

Question 2

Types of collateral: goods

Answer 2

Include all things which are movable at the time the security interest attaches, and include the unborn young of animals and growing crops. Also includes fixtures.

1) consumer goods
2) equipment
3) farm products
4) inventory

Question 3

Consumer goods

Answer 3

Used or bought for use primarily for personal, family, or household purposes

Question 4

Equipment

Answer 4

Used or bought for use primarily in business (catch all or default category of goods)

Question 5

Farm products

Answer 5

Crops or livestock or supplies used or produced in farming operations or products of crops or livestock in their unmanufactured states (milk, eggs, wool-clip) if they are in the possession of a debtor engaged in farming operations.

Question 6

Inventory

Answer 6

Held by a person who holds them for sale or lease or to be furnished under service contracts; materials used or consumed in a business for a short period of time.

Question 7

Semi-intangible and tangible property (8 types)

Answer 7

1) instruments
2) documents
3) chattel paper
4) investment property
5) accounts
6) deposit accounts
7) commercial tort claims
8) general intangibles

Question 8

Instruments

Answer 8

Negotiable instruments and any other writing which evidences a right to the payment of a monetary obligation, and which are in the ordinary course of business transferred by delivery with any necessary indorsement or assignment (checks, notes, promissory notes)

Question 9

Documents

Answer 9

A document which in the regular course of business is treated as evidencing that the person in possession of it is entitled to receive, hold, and dispose of the document and the goods it covers (bill of lading, warehouse receipt)

Question 10

Chattel paper

Answer 10

A record or records which evidence both a monetary obligation and a security interest in or a lease of specific goods (promissory note + security interest)

Question 11

Investment Property

Answer 11

Includes items such as stocks, bonds, mutual funds, and brokerage accounts containing such items.

Question 12

Accounts

Answer 12

A right to payment (not evidenced by an instrument or chattel paper) for goods sold or services rendered, or for:

3) real property
4) for a policy of insurance issued or to be issued
5) for a secondary obligation incurred or to be incurred
6) for energy provided or to be provided
7) for the use or hire of a vessel
8) arising out of the use of a credit card
9) as lottery winnings.
10) health care insurance receivables

Question 13

Deposit Accounts

Answer 13

An account maintained with a bank. Art. 9 applies only to nonconsumer deposit accounts and deposit accounts that are claimed as proceeds of other collateral

Question 14

Commercial tort claims

Answer 14

A claim arising in tort with respect to which the claimant is an organization, or where the claimant is an individual and the claim arose i the claimant’s business or profession and does not include damages for personal injury or the death of an individual.

Question 15

General Intangibles

Answer 15

Any personal property not coming within the scope of the other definitions (software, patent and trademark rights, copyrights, goodwill). A general intangible under which the account debtor’s principal obligation is a monetary obligation is a payment intangible.